The road to financial security is long and winding. There is no such thing as a sure thing–a straight shot to success and contentment. In order to get ready for retirement, you will have to work hard and plan ahead. Even then there are no guarantees. Life is a gamble. The best you can do is try and arrange it so you’ll have enough money to enjoy your golden years. Following are a few tips on ways to prepare for retirement.
Determine Your Needs
Your first priority is to take the time to determine what your needs will be when you retire. Do you plan on being able to jet from continent to continent when the whim strikes? Do you envision spending summers in the Catskills and wintering in Bermuda, with an occasional weekend in Aspen? Or will you be content with a rocking chair on your porch watching the neighborhood kids play ball in the street? Most people’s vision of retirement is somewhere in between those extremes. You need to decide upon a realistic goal, and then make plans that will help you achieve that goal–preferably without having to work 20 hour days.
Begin Saving Early
As soon as you can you should begin saving money for your retirement. Although it’s possible to start late in life and put nearly everything you make away for the remaining years of your life, you would be better off to start a savings account earmarked specifically as a retirement fund the moment you start bringing home a paycheck. A little bit of money set aside every week, and invested wisely, will eventually turn into a healthy retirement fund–as long as you do it sensibly, and regularly add to it.
Make Use of Tax Exempt Savings Plans
A good way to begin a retirement fund is to look into tax exempt savings plans, such as 401ks and IRAs, which are tried and true methods of putting money away for your later years. The benefits offered by 401ks and IRAs have been extolled by thousands of retired people. If you regularly contribute to such funds, and are fortunate enough to have your employer match your deposits, your retirement fund will continue to grow and will be available for your use when you need it.
Don’t Put All Your Eggs In One Basket
The name of the game in investments is diversity. Simply put, diversity means not putting all your eggs in one basket. In order to make sure your retirement fund isn’t hit hard by any one stock or mutual fund tanking you should spread your investment funds around. Put a little bit into stocks, some into bonds, some into tax-exempt savings accounts, and maybe even a little into precious metals. It’s never a good idea to gamble your entire net worth on a horse race. What if your horse comes up lame? Metaphorically speaking that’s what could happen if you put all your money into a stock and it drops dramatically overnight.
Keep Your Hands Off Your Retirement Funds
No matter how much you may think you have to dip into it, keep your hands off your retirement funds. Find another way to deal with emergencies. If you have to take out a short term loan with high interest rates to get you out of a financial bind, so be it. You’ll be better off in the long run if you leave your retirement fund alone and let it continue to build.
Seek Professional Help
Seeking the help of a professional, such as an accountant or financial planner, will probably be worth every penny you have to pay them. They are in the business of helping people like you plan for their retirement. They can work the numbers and determine what you will have to do in order to meet your retirement goals. You would do well to listen to their advice.
Monitor Your Progress
Don’t simply put your money into a savings account and forget about it. Monitor your progress along the way and make sure your retirement fund is growing at the rate you expect it to in order to achieve your goals. If you see that you’re falling a little behind your intended rate of savings, you can stick a little more into your retirement fund to get back to where you know you should be.
Guest post from Andy Granger. Andy writes for the Business Insurance Guide.
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